High Risk Merchants – Avoid Making These Common Mistakes

Most banks are wary of high risk merchants, as they sometimes cause the greatest losses in their books. This is the main reason why businesses classified in high risk category pay greater fees to the bank than the others. If high risk merchants keep the following points in mind, they are sure to make lesser mistakes. 

1. Keep the dispute numbers to minimal.

Too many disputes will lead to too many extra fees for processing and clearing the issues. Merchants can ensures that there are lesser disputes by laying down clear cut processes to ensure maximum customer satisfaction to each and every client. They should ensure that refunds are released promptly, before a dispute is even filed.

2. Keep the chargeback ratio down

The moment a merchant follies to solve a dispute amicably the credit card company will raise a chargeback in order to process the refund on the client’s behalf. All smart merchants should avoid such a scenario as the charge back costs charged by the banks is too high and eats away profits.

3. Unusual And Abnormal Transactions

A merchants should be instantly alarmed when he notices unusual activity and multiple transactions in a short period of time. Banks get very cautious of unusually high volumes and expect the merchant to keep them informed of any clearance sales or other high revenue planned activities.

Why Get an Offshore High Risk Merchant Account

If you are a growing business and planning to accept credit card payments from your consumers directly, a merchant would be required to facilitate such provisions. No business can remain competitive without a high risk merchant account; as instant payments have become the norm. In a scenario where a merchant account is must, one that is offshore is the ideal choice, on ground of myriad advantages over a domestic one.

Offshore and Domestic Accounts

As far the definitions for the two go, offshore merchant accounts are provided by banking setups beyond the borders of the country, whereas in case of domestic accounts the provider is a domestic one.

Having a domestic account comes with the added baggage of local concerns. For example, if you are a high risk business or one that may bring bad name to the merchant itself, domestic banks, with a view for their own reputation will steer clear of you. With offshore accounts, this is not an issue.

Advantage of Offshore accounts

·         Offshore accounts provide for accepting multiple currencies, thereby allowing you the opportunity to expand into foreign territory.

·         Offshore accounts come with lower taxation charge, often based around the resident country of the banking service.

·         No trading restrictions in case of offshore accounts, which ensures you can expand and grow without the fear of local scrutiny.

·         There is no volume cap to put a restriction on the amount of business you do.

With its many advantages it is clear that an offshore merchant account is much more rewarding than a domestic one.

Things Travel Agencies Should Know About Credit Card Processing

Many credit card processors are reluctant to offer merchant account services to travel agencies owing to their high risk nature. This is because historical data reveals that consumers are more likely to dispute and charge back on travel agency transactions than many others.

As a consequence new travelling agencies are finding it extremely difficult to set up a high risk merchant account. To make it easier for you, mentioned below are things you should know about credit card processing:

1.    Understand Risk

Before you apply for a merchant account it is important that you first understand the potential liabilities of a sales agent, associated with selling online air fares. Understanding your exposure to possible risks will help you take adequate steps to minimize them and protect your travel agency from losses.  

2.    Set Up Card Acceptance Policies And Procedures

Setting up card acceptance policies and procedures will help you address the following issues:

·         An authorization request approved by an issuer indicates that the credit card account is in good shape.

·         Your organization may not be a MasterCard or Visa merchant, which is subjec to the rules and regulations of Credit Card Associations. However, airline is a MasterCard and Visa merchant and is subjected to all these rules and regulations.

3.    Experience Matters

Make sure you choose an established and experienced payment processor who has in the past worked with travel agencies and other high risk businesses. Also, your processor must be capable of assisting you in developing and implementing fraud prevention measures during the processing cycle.

Important Things about Data Breach Insurance Merchants Should Know about

Technological boons are always double faced. For example, on the one hand, it has helped us with innovative ideas and ways to protect important data, while on the other hand, everyday newer means are being innovated to get hold of those data.

The breach of data has far worse impacts on high risk merchant account holders or one’s that have high volume merchant accounts. 

To help the merchants cope with the loss, special data breach insurance has been launched. To know more about the data breach insurance policies, read on—

1) Also known as cyber liability insurance, data breach insurance helps in the protection of the business from the associated costs, in case breaching of data occurs.

2) The policies generally cover one or more of the areas listed below—

·         Notification Obligations

·         Liability Claims

·         Penalties and Fines

·         Investigation Expenses

3) The insurance policy will cease to work unless and until you have a certified staff member for security of the information who would regularly keep a check on the data. Other than this, for storing data, you must follow the guidelines laid down by Payment Card Industry Data Security Standards properly.

4) When you go around finding the perfect insurance company, don’t hire those companies who do not ask you about the current security schemes.

5) One of the most important things that you must know is that data breach insurances don’t help you with your security or protect your important data and documents. It is just meant to mitigate loses that are associated with such a breach. However, after loses, they may provide the companies with some valuable points regarding data security.

Common Reasons You May be Denied a Merchant Account

Before issuing a merchant account, banks evaluate your business for the amount of risk involved. The risk can be accredited to the nature of the business; volumes of business conducted every month, potential chargebacks, etc.

You may be denied a merchant account on several accounts, some of which are as the following:

Doubtful Credit History

The first and foremost factor that a merchant account processor will check is your personal credit history.

If your account’s credit history shows fraud activity, chances of denying a merchant account are higher.

However, some merchant account processers assign account under multiple users. In this case, make sure that all your associates have a good credit history.    

False Information about Your Business

When you fill an application form for merchant account, it asks you for details about the average ticket size and monthly processing volumes.

Merchant account processers will scrutinize and verify every single piece of information you provide. In case any discrepancy is found in with the information provided, your application will be disapproved.

Already on the backlist

Banks or merchant account processers have a TMF list, which they use to detect client’s history. In case your application was earlier rejected by a processing company, your name will be on that list.  

Get ready for disapproval in this case.

It is important to remember that you’ve got to be honest about your business, and credit history with the merchant account providers, or your business might have to deprive customers the convenience to pay online.